ADMIS News
COTTON
US cotton ending stocks are the lowest in six years, but world stocks are not, and this should limit the upside for prices going forward. December cotton was higher overnight but closed lower yesterday despite a bullish USDA supply/demand report. The sharp decline was due to a permanent accounting change that the USDA made in the balance sheet for Brazil going back to 2000/01. This was done to better reflect Brazil’s growing season and it reflected no real change on the global supply situation. They will be close to surpassing US exports for the first time since the 1800s.
COFFEE
December coffee extended its rally overnight, trading to its highest level since September 26. With Brazil’s harvest nearly complete and signs of lower Central American production, coffee bulls are hopeful that the market has put in a major low. However, the Brazilian real sold off yesterday after hitting technical resistance, and if it resumes its downtrend, it could put pressure on growers to market their supply.
SUGAR
After reaching a 2 1/2 week high on Monday, sugar prices have seen three daily losses in a row and are on course for a negative weekly reversal. Unconfirmed reports that India will not allow sugar exports this season provided little support to the market this week, probably because there have already been several signals of a potential cutoff. The Indian monsoon finished somewhat better than expected, which suggests their cane crop may be better as well.
COCOA
December cocoa has not seen two consecutive daily results positive or negative since late September, but a higher close today could change that trend. Demand seems to be holding up against high prices, which is bullish, but El Nino may pose less of a threat to upcoming production.
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